Correlation Between Barings Emerging and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Ashmore Emerging at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Barings Emerging and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Emerging Markets and Ashmore Emerging Markets, you can compare the effects of market volatilities on Barings Emerging and Ashmore Emerging and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Barings Emerging with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Ashmore Emerging.
Diversification Opportunities for Barings Emerging and Ashmore Emerging
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Ashmore is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets and Barings Emerging is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Barings Emerging Markets are associated (or correlated) with Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Barings Emerging i.e., Barings Emerging and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Barings Emerging and Ashmore Emerging
Assuming the 90 days horizon Barings Emerging is expected to generate 1.4 times less return on investment than Ashmore Emerging. But when comparing it to its historical volatility, Barings Emerging Markets is 1.08 times less risky than Ashmore Emerging. It trades about 0.06 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 717.00 in Ashmore Emerging Markets on November 2, 2024 and sell it today you would earn a total of 116.00 from holding Ashmore Emerging Markets or generate 16.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Barings Emerging Markets vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Barings Emerging Markets |
| Ashmore Emerging Markets |
Barings Emerging and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Ashmore Emerging
The main advantage of trading using opposite Barings Emerging and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Ashmore Emerging can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ashmore Emerging will offset losses from the drop in Ashmore Emerging's long position.| Barings Emerging vs. Flkypx | Barings Emerging vs. Rbb Fund | Barings Emerging vs. Tax Managed Large Cap | Barings Emerging vs. Flakqx |
| Ashmore Emerging vs. Qs Global Equity | Ashmore Emerging vs. Ultra Short Fixed Income | Ashmore Emerging vs. Gmo International Equity | Ashmore Emerging vs. Doubleline Core Fixed |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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